ANALYSIS: Allegiant to face heated competition in Florida market

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Though no other airlines fly the Florida routes Allegiant Air plans to launch this fall, the Las Vegas-based carrier will still face formidable competition with its Sunshine State expansion.

That may be fine with Allegiant executives, who in recent weeks have expressed more willingness to compete head-on with major carriers.

Allegiant will launch 16 new routes from Florida - an expansion that will add ten new cities to Allegiant's route map, including Stewart International airport and Long Island MacArthur airport near New York City - between 25 October and 20 December.

Allegiant also announced two new routes from Phoenix-Mesa Gateway Airport.

With the expansion, Allegiant will serve 99 airports nationwide, more than the 97 destinations served by low-fare leader Southwest Airlines.

The Florida flights will operate from Orlando Sanford International airport, St. Petersburg Clearwater International airport near Tampa and Punta Gorda Airport on Florida's southwest coast. Those are so-called "secondary" airports where other major US carriers don't operate.

That doesn't mean Allegiant will not face competition.

Allegiant's new service from Orlando to Concord, North Carolina, set to start 20 December, pits it against US Airways, which flies up to nine times daily to Orlando International Airport from Charlotte, a scant 20 miles (32km) from Concord.

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Sources for all charts: Capstats, Allegiant Air, published airline schedules

Southwest also flies once daily from Charlotte to Orlando International.

Likewise, Allegiant's planned flight from Columbus, Ohio, to St. Petersburg, set for a 23 November launch, will parallel Southwest's daily flight from Columbus to Tampa International airport.

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Allegiant also plans to begin seasonal service from Islip - less than 40m from two major New York airports - to Punta Gorda, which is between Tampa and Fort Myers.

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Southwest already flies daily from Islip to Tampa International and seasonally from Islip to Fort Myers. In addition, Delta Air Lines, American Airlines and JetBlue Airways will fly up to 23 times daily this winter from New York's LaGuardia and John F. Kennedy (JFK) International airports to Tampa and Fort Myers, according to published flight schedules.

Increased willingness to compete

Since it launched in 1997, Allegiant's route map has primarily been composed of routes to secondary cities with little or no competition. As recently as the end of 2012, competed direcly with other airlines on fewer than 20 of its 191 routes.

But in July, Allegiant president Andrew Levy told Flightglobal that he is increasingly open to facing other airlines directly.

He noted that in recent years Allegiant has entered markets once largely dominated by Southwest, like Boise, Idaho, Reno, Nevada, and Oakland, California.

Levy said that Allegiant has been successful because Southwest's fares have increased in recent years, a result of capacity cuts and increasing costs.

"[Allegiant] can come in underneath [Southwest] in certain [markets] and be able to provide that fare that Southwest could have provided... 15 years ago," Levy said. "Southwest's evolution is creating some opportunities."

In addition, Allegiant will launch flights from Los Angeles to Honolulu, where it will compete against Delta, American, United Airlines and Hawaiian Airlines, on 30 July.

Levy thinks Allegiant's lower costs will make the routes successful.

"The ability to come to the market with a product that has those advantages are huge," he said.

Capacity cuts create opportunity

Industry consolidation and resulting capacity cuts has also allowed Allegiant to add service to smaller airports, Levy added.

Among the airports that have seen notable capacity cuts in recent years are Islip and Stewart.

In 2012, airlines offered 986,000 seats from Islip, down nearly 50% since 2005, according to Flightglobal/Innovata data.

Delta, Spirit Airlines and Continental Airlines - now part of United - eliminated Islip flights in recent years and Southwest, long the dominant Islip carrier, has cut capacity there 46% since 2005, according to Flightglobal/Innovata.

Likewise, capacity at Stewart fell 24% to 240,345 seats in 2012 since 2005, Flightglobal/Innovata shows.

Picking up abandoned routes

Many of the routes Allegiant plans to launch this fall were served in the last decade by other carriers.

For instance, now-defunct Hooters Air and Pan Am Clipper Connection flew from Columbus to St. Petersburg-Clearwater until 2005. And Vision Airlines flew between Clarksburg in West Virginia and Orlando-Sanford until 2012.

Allegiant itself flew from Portsmouth, New Hampshire to Orlando-Sanford until 2007.